|Surprise announcement by Qantas has left thousands of passengers stranded at airports around the world [Al Jazeera]
Australian Qantas Airways has grounded all its aircraft over a labour dispute, a move it said would cost $21.4m a day.
Alan Joyce, the airline's chief executive, told a press conference in Sydney on Saturday that all aircraft would remain grounded indefinitely until unions representing pilots and ground staff reached an agreement with Qantas over pay and work conditions.
Joyce said: "We have decided to ground the Qantas international and domestic fleets immediately.''
Qantas, which has been hit by a series of strikes, said all employees involved in the action would be locked out from Monday evening and flights grounded from 2pm on Saturday.
"Pilots, licensed engineers and baggage, ground and catering staff are essential to Qantas operations and the lockout therefore makes it necessary for all Qantas aircraft to be grounded," Joyce said, "and I cannot wait until Monday to do so."
The grounding comes as leaders of the 54 Commonwealth of Nations convened in Perth for their biennial summit.
Al Jazeera's Andrew Thomas, reporting from Perth, said that many top officials had arrived and were planning to leave the country with Qantas.
The Australian government called for an emergency arbitration hearing, which was adjourned early Sunday morning after hearing evidence from the unions and airline.
Fair Work Australia, the national industrial tribunal which has the power to suspend or terminate industrial action, will resume Sunday afternoon.
Transport minister Anthony Albanese said the government would take action to intervene in the protracted industrial dispute.
"I am very concerned about Qantas' future. The government is making an urgent application to Fair Work Australia ... to terminate all industrial action at Qantas," he said.
"This will be aimed at both actions by unions and by Qantas management."
Julia Gillard, the Australian prime minister, told reporters in Perth that the dispute posed a threat to the country's "national economy".
"The Qantas dispute escalated today and ... it could have implications for our national economy," said Gillard.
"I believe that Australians want to see this sorted out, businesses want to see it sorted out, passengers want to see it sorted out, I want to see this dispute sorted out.
"That is why we have approached Fair Work Australia under the Fair Work Act."
Thomas said that the tribunal could freeze all normal industrial relation laws in Australia and if it deemed it necessary, it could force not only Qantas to start flying again but it could also force the unions to stop striking.
This would provide the space required to resolve the dispute, which Gillard wants, he said.
In its announcement on Saturday, the airline said flights already in the air would continue to their destinations, but there would be no further domestic or international departures anywhere in the world.
Qantas said the decision to shut down operations was taken in response to industrial action by the unions.
"Joyce says he has to do this radical action now or the airline will die a death by a thousand slow cuts," said Thomas.
"Alan Joyce is holding a knife to the nation's throat ... This is a stunning overreaction. It is straight-up blackmail."
- Richard Woodward, Australian and International Pilots Association
"[Joyce] says if [Qantas employees] carry on damaging the Qantas brand and they keep on scaring passengers off, then this airline will slowly die.
"So he is trying to stop that by essentially pressing the nuclear button now and saying the airline won't fly at all until the unions come back to the negotiating table and accept some of the management's proposal.
"Qantas domestic travel is down somewhere between 10 to 20 per cent at the moment, because people are avoiding the airline as they worry about industrial action affecting their flights."
The airline had been forced to reduce and reschedule flights for weeks because of a series of strikes over staff concerns that their jobs were being moved overseas.
"The financial impact of action taken to date has reached A$68m ($73m) and the action is costing Qantas approximately A$15m ($16m) per week in lost revenue," the airline said.
"Approximately 70,000 passengers have been affected and more than 600 flights cancelled."
Australian pilots criticised Qantas' decision to ground its entire fleet.
"Alan Joyce is holding a knife to the nation's throat," said Richard Woodward, vice-president of the Australian and International Pilots Association. "This is a stunning overreaction. It is straight-up blackmail."
The pilots union, which is engaged in protracted talks with Qantas management over wages and conditions, called the announcement by Joyce "nothing short of a maniacal overreaction".
On Friday, furious staff faced off the management in a heated public showdown that came as Qantas held its annual general meeting (AGM) under extraordinary security in Sydney.
Baggage handlers and other ground staff had launched their latest in a series of strikes on Friday in a bid to force Qantas to scrap plans to refocus its overseas operations on Asia, as the airline warned its future was in jeopardy.
Unions claimed the airline was just seeking to save money by sending jobs overseas as it planned the launch of a premium new airline to be based in Asia, the key plank of its strategy to boost falling international revenues.
They sought guarantees on wages and job security and had vowed to not give in.
Representatives of pilots, engineers and ground staff were also outraged by Qantas's decision to boost Joyce's pay package by 71 per cent to $5.2m just as he announced Qantas's restructuring plans.
Unions and representatives from the Occupy Sydney movement - inspired by New York's sit-in protest on Wall Street - meanwhile picketed the AGM on Friday demanding an "end to corporate greed".
Source: Al Jazeera and agencies